Billionaires and the Top .0001%

Forbes magazine just released its list of the world’s 1,226 billionaires ranked by their net worth. There are several interesting observations about the list. First, there is considerable inequality in wealth among billionaires.

The top 5% of billionaires account for more than 28% of all billionaire wealth.

The average billionaire in the top 10% is worth almost 15 times more than the average billionaire in the bottom 10%.

The Gini coefficient for the billionaire wealth distribution is about 0.50

The distribution of wealth among billionaires is more unequal than incomes in the U.S. but more equal than the overall distribution of financial wealth in the U.S.

The U.S. is one of ten countries with more than one billionaire per million residents (and a population of at least one million). The table below lists these countries and indicates that Hong Kong has many more billionaires per capita, and their wealth is a higher fraction of GDP[1] than in the other nine countries. Another notable fact is that the U.S. and Sweden look fairly similar. This is surprising because most studies indicate that income inequality is substantially lower in Sweden than in the U.S.

Country

Billionaires per Million Residents

Billionaire Wealth as % of GDP

Hong Kong

5.35

70.6%

Kuwait

1.77

5.2%

Israel

1.66

19.4%

Lebanon

1.41

32.6%

United States

1.36

11.3%

Sweden

1.16

16.5%

Switzerland

1.14

7.0%

Ireland

1.09

10.1%

Taiwan

1.03

14.3%

Norway

1.00

3.0%

Comparisons of wealth among the very rich, or between the very wealthy and the population as a whole are interesting, but should probably not drive policy debates (despite the so-called Buffet Rule). First, wealth creation is not a zero sum game, so fewer billionaires per capita would not be a desirable policy goal. Second, the tax and social welfare policies of Sweden and the United States are quite different, yet the two countries have similar numbers of billionaires per capita and Sweden’s billionaires own a larger share of the country’s wealth.

[1] GDP is, of course, a measure of a country’s income/production not wealth, but it is probably measured more reliably than wealth and is correlated with a country’s aggregate wealth.